As 2019 drew to a close a father and son resolved an insider trading case with the Manhattan U.S. Attorney’s Office. The action centered on trading while in possession of inside information about a pharmaceutical company. Congressman Christopher Collins, who sat on the board of the company, tipped his son who, avoiding losses. U.S. v. Collins, No. 18 Crim 567 (S.D.N.Y.); SEC v. Collins, Civil Action No. 18-cv-7128 (S.D.N.Y.). Yesterday another father and son insider…

Market manipulation has long been the focus of the SEC, the CFTC and other regulators. Spoofing, a particular form of market manipulation, is now a focus of the CFTC and DOJ following amendments to the CEA under Dodd-Frank. There Congress added a specific statutory provision prohibiting the trading technique. Prior that statutory amendment few spoofing cases were brought. While it seems clear that spoofing is prohibited by the kind of general antifraud provisions contained in…

A look forward – a look back: The Commission announced the initial meeting of its Asset Advisory Committee this week. The new Committee is designed to make available diverse views on the business to the Commission and provide the agency with advice. The meeting is scheduled for later this month. OCIE announced its exam priorities this week. Those priorities are key not just for those facing exams but also in reviewing compliance systems. Finally, the…

The Commission’s focus on retail investors, reflected not just in enforcement trends but also in the OCIE inspection program, is spawning interesting trends. One is the rise in enforcement actions involving investment adviser. That trend traces to before the current retail investor focus, but has been accelerated by it. The other is in offering fraud actions. The common denominator here is the victims – retail investors. This week two enforcement actions have been brought focused…

The exam priorities of the SEC’s Office of Inspections and Compliance or OCIE, announced on January 7, 2020, are a key priority for every investment advisor and investment company. Those priorities are key not just for those who may be facing an exam this year but also for the industry. The priorities typically center on a combination of emerging issues, key risk areas for the firm, traditional areas of concern not just to the agency…

As the new decade unfolds the Commission’s Enforcement Division continues to focus on offering fraud actions and, in particular, a claimed lending program called the Merchant Cash Advance. That program was operated by 1 Global Capital LLC supposedly for the benefit of firms with few credit opportunities. According to the Commission, the only actual beneficiaries of the so-called lending program were those behind the scheme. The Commission brought its first action involving the scheme in…

A look forward – a look back: The Commission continued to propose modifications to regulations in an effort to update standards. Recently, for example, proposals were made to modify the definition of accredited investor. As the year drew to a close the agency proposed modifications to the auditor independence standards, many of which trace to the passage of the Sarbanes-Oxley Act nearly two decades ago. Cases brought by the agency continue to focus on the…